GOODWILL AND INTANGIBLE ASSETS

12 Months Ended

Dec. 31, 2021

Goodwill and Intangible Assets Disclosure [Abstract]

GOODWILL AND INTANGIBLE ASSETS

4. GOODWILL AND INTANGIBLE ASSETS

Identifiable intangible assets

The following tables set forth the components of intangible assets as of December 31, 2021 and 2020:

		As of December 31, 2021
	Estimated	Adjusted
	Useful	Carrying		Accumulated
	Life	Amount		Amortization			Net
Patents and copyrights	2-17 years	$	375	$	(250	)	$	125
Developed technology	5 years		400		(147	)		253
		$	775	$	(397	)	$	378

		As of December 31, 2020
	Estimated	Adjusted
	Useful	Carrying		Accumulated
	Life	Amount		Amortization			Net
Patents and copyrights	2-17 years	$	481	$	(331	)	$	150
Developed technology	5 years		400		(67	)		333
		$	881	$	(398	)	$	483

The following summarizes amortization of acquisition related intangible assets included in the statement of operations:

	Years Ended December 31,
	2021		2020
Cost of revenues	$	95	$	81
General and administrative		10		10
	$	105	$	91

INTELLICHECK, INC.

NOTES TO FINANCIAL STATEMENTS

(All dollar amounts are rounded to thousands, except share data)

The Company expects amortization expense for the next five succeeding years, and thereafter, will be as follows:

2022	$	105
2023		105
2024		105
2025		39
2026		20
Thereafter		4
	$	378

These amounts are subject to change based upon the review of recoverability and useful lives that are performed at least annually.

Goodwill

Goodwill represents the excess of purchase price over the fair value of the assets acquired in businesses combinations. Under ASC 350, purchased goodwill is not amortized, but rather is tested for impairment. The Company’s goodwill balance was $8,102 as of December 31, 2021 and 2020. This goodwill resulted from the acquisitions of Mobilisa, Inc. and Positive Access Corporation.

For the years ended December 31, 2021 and 2020, the Company performed its annual impairment test of goodwill in the fourth quarter. Under authoritative guidance, the Company can use industry and Company specific qualitative factors to determine whether it is more likely than not that impairment exists before performing step one of the quantitative goodwill impairment test. An entity is not required to calculate the fair value of a reporting unit unless the entity determines, based on a qualitative assessment, that it is more likely than not that its fair value is less than its carrying amount. Events or changes in circumstances which could trigger an impairment review include macroeconomic conditions, industry and market conditions, cost factors, overall financial performance, other entity specific events and sustained decrease in share price.

The Company performed the first step of the goodwill impairment test to identify potential impairment by comparing fair value of the Company to its carrying amount, including goodwill. The fair value was determined using the weighting of certain valuation techniques, including both income and market approaches which include a discounted cash flow analysis, an analysis of similar public company financial information, and an analysis of our market capitalization, which is sensitive to the volatility of the Company’s stock price. Although the Company believes that the factors considered in the impairment analysis are reasonable, changes in any one of the assumptions used could have produced a different result which may have led to an impairment charge. Any future impairment loss could have a material adverse effect on our long-term assets and operating expenses in the period in which impairment is determined to exist.

For the years ended December 31, 2021 and 2020, the Company determined that the fair value of the Company was greater than its carrying amount and therefore the second step of the goodwill impairment test was not required.